European stocks were little changed after the Bank of England (BoE) changed its forward guidance.

BoE Governor Mark Carney renewed his pledge to keep interest rates at a record low today as he presented the quarterly inflation report.

However, he changed the central bank's so-called forward guidance following a faster-than-expected pick up in employment.

The Bank had vowed to hold the benchmark rate at a record low of 0.5% at least until the unemployment rate fell to 7%, but now that it is 0.1% off the threshold, the BoE has been forced to switch its stance.

Carney said today he the Bank will need to consider a list of factors before raising interest rates gradually. The focus on the guidance is now squarely focused on the need to absorb all the spare capacity in the economy.

The range of indicators for raising the interest rate depend mainly on: the unemployment rate; the degree of participation in the labour market; the average number of hours worked and the extent of involuntary part-time working; surveys of spare capacity in companies; labour productivity and wages.

"Needless to say, this 'second phase' of guidance lacks the simplicity of the previous one," said Capital Economics. "And there is a clear concern that, in putting more focus on the general degree of spare capacity, it simply replaces the unemployment rate with an even more unpredictable, and much less observable, economic concept."

European industrial output, Chinese trade

European industrial production climbed 0.5% year-on-year, compared to a 2.8% increase in November and the consensus forecast of a 1.8% gain, the European Commission's statistical office unveiled.

On a month-on-month basis, production dropped 0.7% in December from a rise of 1.6% the month before, surprising analysts who had expected a 0.3% fall.

In China, the General Administration of Customs revealed exports increased 10.6% percent in January from a year earlier. Economists had predicted a 0.1% advance. Imports were up 10%, exceeding the 4% jump that had been forecast. This resulted in a trade balance of $31.86bn, surprising analysts who had expected a slight decline from the $25.64bn surplus registered in December.

Italy's Letta signals he won't buckle to pressure to resign

Italian Prime Minister (PM) Enrico Letta has indicated he has no plans to step down despite pressure to resign and let his party's chief Matteo Renzi take over.

The PM met with Renzi today to discuss the future of the European nation's government. A new programme will be presented at 18:00 in Rome.

"Enrico Letta will present 'Commitment Italy,' a proposed coalition pact for the parties that support the government," Letta's office said in an e-mailed statement to Bloomberg after their meeting.

Renzi said he would make his comments tomorrow.

Miners rally

A gauge of commodity producers posted the best performance of the 19 industry groups in the Stoxx 600 including Rio Tinto and Glencore Xstrata. It followed the positive Chinese trade data and comments from Goldman Sachs which said: "We expect the miners to continue to perform well in the immediate short term, as the market focuses on better cashflow from volume growth, weaker FX, cost reductions and capex cuts."

WM Morrison jumped after Bloomberg said that its founding family is considering taking the supermarket group private. The Morrison family, who are thought to hold around 9-10% of the UK grocer, are said to have spoken to a number of private-equity firms to gauge their interest.

Heineken edged higher after saying it expects sales to increase in 2014.

Telecity Group declined after posting 2013 earnings that fell short of consensus.

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